Independent Study Casts Financial Doubt on NASA SLS Program

By | September 1, 2011 | Feature, Government

[Satellite News 09-01-11] While NASA’s cost estimates for its Space Launch System (SLS) program’s budget planning are reasonable in a three-to-five-year budget horizon, program cost efficiencies could represent a risk to the program and lead to the impression that the estimates are optimistic, according to an independent study released Aug. 20 by Booz Allen Hamilton (BAH).
   The BAH study concluded that financial reserves set aside in NASA’s cost modeling techniques for its SLS, MPCV, and 21CGS programs are “insufficient.” 
   Raymond James Analyst Chris Quilty said the independent study casts serious doubt on NASA’s SLS heavy-lift rocket development plans and is unlikely to please either supporters or detractors of the program. “Adding further to the confusion, the report provided no specific cost estimates but instead provided only its final assessment, which was not good news for NASA,” Quilty told Satellite News.
   NASA and U.S. President Barack Obama’s administration have been generally opposed the SLS program, which was mandated by the NASA Authorization Act of 2010 to act as a jobs program for NASA contractors such as ATK, Boeing and Lockheed Martin. Quilty said the program has been caught in the downdraft of the Obama administration’s decision to cancel the Bush-era Constellation program. 
   “NASA has been conducting a classic ‘slow walk’ of the SLS program in the hope that the program will die under the weight of its bloated and growing cost estimates. Meanwhile, congressional benefactors of the SLS program in Texas, Utah, and Alaska have not taken kindly to NASA’s intransigence, as evidenced by a recent subpoena issued to NASA for all SLS-related documentation,” said Quilty. 
   NASA could arguably claim that the BAH report justifies another round of long-term cost discussions over its terminated Ares 5 launcher program, which was meant to replace NASA’s space shuttle that retired earlier this year. According to Quilty, U.S. Congress will likely insist that NASA comply with existing law and commence development of the SLS. 
   “While the outcome of this showdown is hard to predict at this time, commercial challengers to the NASA-led programs such as SpaceX, Sierra Nevada Corp., Blue Origin, and Boeing are aggressively pushing ahead in the hope that ongoing delays with the SLS program could provide a permanent opening to supplant the program,” Quilty said.
   In April, NASA distributed $269 million to four U.S. commercial launch companies as part of the Obama administration’s National Space Policy to develop domestic alternatives to send astronauts to orbit. Of the 22 proposals received by NASA for the commercial crew development program, SpaceX, Sierra Nevada Corp., Blue Origin and Boeing were selected to receive program awards.
   The federal started providing financing to these companies in May to cover a year of development and research work. NASA said the award winners would be paid as they meet milestones outlined in their proposals. The program was developed to take over the workload for the retiring space shuttle program, which will be retired before the end of the year. Until an alternative is developed, the United States will have to rely on Russian launchers, which are priced at $50 million per seat.
   NASA Program Director Philip McAlister said the commercial crew development program expects to yield results by 2015, depending on future financing available to NASA and the performance of the contract winners.
   “While 2015 is our most realistic time frame, we are hopefully going to make a lot of progress over this next year so we can get there as soon as we can,” McAlister said during an April press conference.
   Boeing received the largest share of the commercial crew development program award, receiving $92.3 million to design a space capsule. Sierra Nevada received $80 million to fund the development of a small space plane capable of reaching low-Earth orbit. Blue Origin, a private space company established by Amazon founder Jeff Bezos, also will receive $22 million to work on a space capsule design.
   SpaceX, which is already under NASA’s COTS contract to carry cargo to the International Space Station, will receive $75 million to make its Falcon 9 medium-lift rocket and Dragon capsule suitable for manned missions. McAlister said SpaceX was selected due to the company’s pair of successful Falcon 9 launches in 2010 as well as its test of its Dragon capsule in December 2010.
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